Which Types of Home Insurance Will Cover the Possessions Inside Your House?
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It took time, effort, and money for you to acquire your personal possessions, and it would take significant effort and expense to replace those possessions if lost in an emergency. Some items have emotional significance and can’t be replaced, but there is insurance available to cushion some of those losses.
Homeowners and renters insurance
Both homeowners and renters insurance policies cover personal property loss. This helps owners and renters in the event that personal possessions are damaged or lost in an situation covered by the insurance policy, such as natural disaster or home invasion.
Be aware that there are limits to how much a policy can pay out on personal property, and there are two types of personal property coverage with a homeowners or renters insurance policy. A policy can cover the replacement cost (how much it take to buy new items) or actual value (what specific items are worth, figuring in depreciation) of items.
For individuals with particularly valuable personal property, it is possible to purchase additional coverage.
What possessions are covered?
Nearly all contents of a home are covered by personal property coverage within a home insurance policy. This includes furniture, appliances, cookware, electronics, linens, tools, and jewelry.
Possessions that are covered fall under two categories:
- Scheduled: Scheduled property is fairly predictable in value. For instance, there is not a lot of difference between the value of one hair dryer and another.
- Unscheduled property: Unscheduled property can vary greatly in value, such as in a wedding ring.
Be aware of the limits an insurance policy can pay our on both scheduled and unscheduled property, and consider purchasing additional coverage on unscheduled property with high value.
There are some items personal property insurance usually does not cover. Pets fall under this category. Cars, trucks, boats, and other recreational vehicles are not insured in such policies, either.
For those who are self-employed, it is important to realize that business inventory or property must be separately insured because homeowner’s and renter’s insurance policies do not protect your business.
Staying up to date on personal property coverage
Since your personal property is unlikely to remain the same over the years, your needs for coverage are ever-changing. Setting up a regular schedule to reassess the value of your belongings is a good idea, and many insurance companies can set up annual reminders to update your list of personal property.
Save your receipts from larger purchases and also make a note of any items you sell, so you can reassess the value of your total personal property at a scheduled time each year. Many people choose the beginning of each year to take stock because it signifies a fresh start and also takes into account any large gifts received over the holidays.
Having homeowners or renters insurance with personal possession coverage provides peace of mind. While no one wants to imagine a disaster resulting in significant property loss, it can and does happen. With the proper insurance in place, it is far easier to recover from a major loss, such as a fire or flood. An insurance policy can provide the funds needed to replace much of the lost property and get swiftly back into the swing of things.